The third-party payer healthcare industry is a well-established industry. In general, in such third-party payer health care industry, a “third party” (referred to herein generally as an “insurer”) pays for healthcare services received from a service provider (any person, such as a doctor, nurse, dentist, optometrist, pharmacist, etc., or institution, such as a hospital, clinic, or medical equipment provider, that provides medical care, services, drugs, healthcare supplies, medical equipment, home health, etc.) to a member (or “insured”) consumer. As used herein, a healthcare consumer is any person to whom healthcare services are rendered. In some situations, the healthcare consumer may be referred to herein as a “patient”, but the services rendered are not limited to those rendered by a physician and thus “healthcare consumer” is not limited to a patient. The healthcare consumer may also be referred to herein as a “member” because the consumer is a member of one or more healthcare plans under which a third-party payer (insurer) pays for at least a portion of certain healthcare services rendered to the consumer.
Examples of third-party payers (or “insurers”) include an insurance company (e.g., BlueCross® BlueShield®, Aetna® Inc., etc.), Health Maintenance Organization (“HMO”), Preferred Provider Organization (“PPO”), third-party administrator (TP A), Self Insured/Self Funded Employer, or local, state, or Federal Government (e.g., Medicare) and their approved intermediaries including private insurers providing Medicare or Medicaid health insurance in coordination with, or on behalf of, the Government (e.g., BlueCross® BlueShield® of South Carolina provides and administers Medicaid and Medicare insurance), as examples. The insurers generally negotiate with the service providers (e.g., hospitals, doctors, etc.) various terms, including the amounts (and corresponding conditions) that the insurers will pay the service providers for services rendered to the consuming members of the insurers. For instance, a negotiated contract may specify that an insurer will pay a service provider X amount for performance of a given healthcare service (e.g., caesarean section procedure, open heart surgery, blood test, routine physical exam, LASIK eye surgery, dental root canal, prescribed pharmaceuticals, healthcare equipment (e.g., wheelchair), etc.) for one of its members. The contract may specify those healthcare services for which the insurer will reimburse the service provider, as well as the corresponding reimbursement rates for each service. That is, the contract may define how the reimbursement is to be computed for each service. For instance, the contract may list things that are not covered and/or may specify that certain items are limited in the number of services that are allowed.
Once the service is provided and the claim is submitted, then a claim processing and adjudication system may be used to evaluate the claim under the insurer's contract with the service provider, etc. and determine the insurer's liability as well as the consumer's liability for such service. In general, claim adjudication refers to determination of liability of one or more parties (e.g., the patient/member, insurer, service provider, etc.) for a given healthcare service based on predefined relationships/responsibilities (e.g., the above-described contracts between the insurer and service provider and/or contracts between the member or member's employer, etc. and insurer). Such claim adjudication typically includes evaluation of the member's specific health benefit plan and status of their accumulators/financial accounts associated with their benefit plan to arrive at a determination of liability for the member/patient and/or insurer. Adjudication typically calculates patient liability based on such features as: 1) provider contracted rates/network benefit, 2) member's specific health benefit plan, 3) member's specific financial balances, accumulators, and accounts (deductibles, visits allowed/used, HRA, HSA, FSA, etc.), and 4) clinical edits for the member and their benefit plan. Traditional claim adjudication systems process received claims to adjudicate them (Le., determine liability of the parties), and post/commit the adjudicated claim for payment by an insurer, in response to which funds are distributed from the insurer for the insurer's determined liability.
As described further herein, typically medical claims are adjudicated to determine the insurer's liability as well as the consumer's liability for medical services rendered by a medical service provider, such as a physician, hospital, etc. Similarly, in the event that pharmaceuticals (e.g., drugs, equipment, etc.) are prescribed, pharmaceutical claims are adjudicated to determine the insurer's liability as well as the consumer's liability for such pharmaceuticals rendered by a pharmaceutical service provider (or “pharmacy”).
Today, more than half of patient visits to physicians result in prescriptions, and most serious medical conditions are treated with one or more prescription medications. Experts at the Institute of Medicine estimate that 30-40% of hospitalizations are directly or indirectly associated with improper use of prescription drugs. Some 213,000 hospital emergency visits in 2005 were attributed to use or misuse of prescription painkillers alone. With expanded prescription drug coverage in the federal Medicare Program (Part D), the potential for inappropriate, as well as appropriate, drug use increases exponentially. Finally, drug costs during the past decade have experienced the most rapid rise of any component of medical service expense.
A consensus of recent research shows that proper and timely use of prescription drugs can prevent or ameliorate acute flare-ups in chronic conditions that are both dangerous and costly. However, major American corporations are eliminating or cutting co-pays for drugs for their employees, such as those for treating heart conditions, asthma, and diabetes (see e.g., Wall Street Journal, May 8, 2007, Personal Journal page D1). As a consequence, insurers seek information not only on the cost of drugs but on how, by whom, and whether they are used.
Yet, currently available computer-implemented methods dealing with pharmacy claims provide limited information. For instance, no currently available computer-implemented methods dealing with pharmacy claims provide information (a) in a clinically relevant time frame using (b) drug-and diagnosis-neutral measures and (c) transparent interactions between patients, prescribing physicians, and prescription drugs that (d) preserve evidence of the prescribing physician's clinical intent and (e) the patient's compliance, and that allows for (but does not require) (f) correlation with relevant medical claims.
Certain historical dimensions of the health care insurance industry are relevant to the context of the concepts presented herein. The first is that pharmacy benefits coverage has not been an integrated component of “standard package” medical insurance. As a consequence, both data and payment systems for pharmacy have historically been separate from those systems for other medical services, such as hospitalization and all aspects of physician and other professional care. One consequence is that even as the standard medical insurance benefit has been extended to pharmacy coverage, both data management and payment systems have remained separate domains. Whereas most health care insurers receive, manage, pay, and analyze their own medical claims, pharmacy claims activities are sub-contracted to Pharmacy Benefit Management (PBM) companies. As discussed below, PBM responsibilities for pharmacy claims analysis tends to be of limited scope.
Existing methods for dealing with pharmaceutical claims are of three general types. The most common type is cost-oriented methods employed by the PBMs. The second type uses methods that subsume pharmacy records within episodes defined by medical claims (hospital, other inpatient, outpatient, or professional claims containing medical diagnosis codes). The third type uses methods that aggregate pharmacy records over some extended time period, using the specific drugs prescribed as proxies for medical condition diagnoses, in order to calculate a patient's relative risk of incurring future medical expense. Each of these three pharmaceutical claim use types are discussed further below.
The presence of pharmacy benefit managers (PBMs) in third party (e.g., health care insurer) claims adjudication systems for payment of pharmacy claims is well established in the industry. A typical PBM receives a claim that is generated when a patient has a prescription from a doctor filled at a pharmacy, and the PBM determines if the drug prescribed is part of the patient's insurance coverage. If the drug is within the patient's coverage, the claim is paid. In some PBM systems, the claim is further examined in attempt to detect fraud, to determine provider utilization of certain drugs, and to encourage the use of generics. However, in the analysis of the pharmacy claims for these additional uses, the PBM does not allow for correlation of the pharmacy claim to another pharmacy claim except as a duplicate, as a substitute generic drug, or for cost review. It also does not allow for correlation to a medical claim. PBM-produced cost tracking reports are typically aggregated to plan or aggregate provider (IPA, clinic) level, but are available within 30 days of pharmacy events.
The second most common type of pharmacy grouper subsumes pharmacy claim data into medical episode grouping logic based on diagnosis codes in medical claims, such as those generated by hospitals, other inpatient facilities, outpatient clinics, and professional providers for billing insurers. Pharmacy claims are treated as incidental to medical claims which are grouped by diagnosis code(s) or relationships between diagnosis and procedure code(s) according to dates of service and prescribing providers. When pharmacy claims cannot be associated with the medical claims based on dates of service and prescribing provider, they are simply listed as pharmacy events based on drug, date, and prescribing provider so as to be associated with the patient/member or provider as a component of total cost. The pharmacy claims are not analyzed for utilization patterns within drugs or relationships between drugs; they are not classified by type, identified as Multi-Drug or Concurrent, and they do not establish intervals for monitoring patient compliance; and they provide no mechanism to analyze medication coordination among multiple prescribing physicians. Examples of this method is Episode Treatment Groups (ETGs) offered by Ingenix, Inc., and the methods described in U.S. Pat. No. 5,918,208 titled “System for providing medical information,”U.S. Pat. No. 5,557,514 titled “Method and system for generating statistically-based medical provider utilization profiles,” U.S. Pat. No. 6,223,164 titled “Method and system for generating statistically-based medical provider utilization profiles,” and U.S. Pat. No. 7,222,079 titled “Method and system for generating statistically-based medical provider utilization profiles.” Because such ETGs systems operate on medical data typically spanning 12 to 36 months, the information produced has limited clinical relevance and currency; rather, it is used largely in pricing services, financial planning, and cost management applications.
The third type of pharmacy grouping method in current use does not attempt to construct either medical or pharmacy episodes, but rather groups evidence of medical diagnoses and drugs from all providers over a period of time to predict a patient's “risk”—that is, a health plan member's probability of consuming future resources, measured in dollars, either for total medical consumption or for prescription drugs alone. Future risk is predicted based on the most recent 6 to 24 months of pharmacy claims (or pharmacy and medical claims). Specific drug codes and therapeutic classes are classified and grouped as proxies for implied disease states, with each diagnostic condition assigned a weighting factor for probable future cost (risk). A patient's drug use is considered in aggregate, with no attention to temporal sequence, prescribing physician, dosage or supply, whether used in a multi-drug therapeutic strategy or concurrent with other drugs, continuity, or any other aspect of a physician's clinical intent or a patient's pattern of use and compliance. Examples of this method include DxCG's Diagnosis Cost Groups (DxCGs), Johns Hopkins University's Adjusted Clinical Groups (ACGs), and Pharmacy Risk Groups (PRGs), the latter also owned and distributed by Ingenix, Inc. (like the above-mentioned ETGs).